Wellbeing: A Complete Reference Guide, Volume V, Economics of Wellbeing

6

Was the Economic Crisis of 2008 Good for Icelanders?

Impact on Health Behaviors

Tinna Laufey Ásgeirsdóttir

University of Iceland, Iceland

Hope Corman and Kelly Noonan

Rider University and National Bureau of Economic Research, U.S.A.

Þórhildur Ólafsdóttir

University of Iceland, Iceland

Nancy E. Reichman

Robert Wood Johnson Medical School, U.S.A.

Introduction

The seemingly flourishing economy of Iceland suffered a major meltdown that is often pinpointed to the first days of October 2008, when the three largest banks collapsed and became nationalized. In a widely viewed televised address, Prime Minister Geir Haarde announced to the country that: “there is a very real danger, fellow citizens, that the Icelandic economy, in the worst case, could be sucked with the banks into the whirlpool and the result could be national bankruptcy” (Haarde, 2008).¹ The day of this landmark speech, October 6, 2008, has widely been viewed as the beginning of the economic crisis in Iceland.²

A period of economic and political turmoil followed, leading to uncertainty about the future prospects of the nation. During the following months, hundreds of firms in the country declared bankruptcy. Inhabitants of Iceland, a population of 320,000, who lived in one of the richest countries in the world, were now facing the prospects of unemployment as well as mounting private and national debt. The announcement of the crisis triggered further unforeseen consequences, including a decision by the United Kingdom to ...